Saddling poorer students with a lifelong debt makes absolutely no sense

We are now in the period of parental listlessness. Not all parents, but that percentage whose kids have gone to university, particularly those who wave goodbye to their youngest. It becomes increasingly clear, as bowls – clean bowls! – are where they should be in the kitchen and there are no longer piles of slightly damp towels gathering, as if by their own cotton magnetism, on bedroom floors, that there is a particular, not altogether welcome, silence that falls on a home when it has emptied itself of teenagers. 

At the most recent count, over 35% of 18-year-olds in England enter higher education. Obviously not all will leave home, but that is still a lot of clean bowls. 

But fear not future parents, as this exodus may not hit you! As with the annual clearout comes the annual fear over the future of universities.  

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There is no one clear reason why the fear is growing this year, though the drop in overseas students leading to a severe dip in income from the inflated fees overseas students pay has a lot to do with it. Despite this I don’t hear a lot of vice chancellors explicitly blaming Brexit – what are they afraid of?  

But the noise is growing ever louder for an increase in student fees. At present, the fees sit at £9,250 per year for students in England and Wales. They are around half that for Northern Irish students at Northern Irish universities, though UK students studying there are chiselled for the full amount. In Scotland, Scottish students pay no fees, while other UK students pay the full £9,250. 

The current argument goes that in order to plug gaps, fees will have to increase. The most recent loud voice loud-hailing for a fees lift is Peter Mandelson, the third leg on the New Labour stool. Mandelson is gunning for one of the most sought-after seats in British academia – chancellor at the University of Oxford. He has written what amounts to a come and get me job application in a column in The Guardian.   

Among the changes to third level education funding he advocates is an annual increase tied to the consumer price index, or 2.5%, whichever is lowest.  

Which is all very well for him. But following this would mean the annual fee for students, in four years, would top £10,000. And only keep growing. 

The argument he uses, and one that many people like to repeat, is that tuition fees open the door for those from deprived backgrounds, evening out the playing field. 

Others have suggested that fees repayment should be seen as a graduate tax, to be paid as gratitude for the fact that wider opportunities are presented to graduates than those who don’t take degrees. 

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This increasingly sits uncomfortably. The thing with the university fees, and the associated student loan, is that they need to be repaid. And that is a debt hanging over young people when things are hugely difficult for them anyway.  

For instance, the interest rate is set, at present, at 7.3%. That accrues on the debt until the young person starts earning enough to pay it off. This repayment threshold is set, at present, at different bands, but the first kicks in for incomes at £24,990. New graduates will repay 9% of their income over that amount. If they don’t earn hugely for a number of years, or ever, but manage to increase their earnings a bit, they’ll see more chopped off for repayment. With all that interest on it.  

At a time when they are looking to start a family or maybe buy something beyond a decent coat, their income will be chopped. 

And this is where the argument that this gathered debt helps less well-off students really hits. A student from a better off family could perhaps look to that family to help with loan repayments or with home deposits. A student without that safety net cannot. So they are loaded with debt, with a very difficult jobs market and not a lot of headroom or options. 

There is another issue and that is with the quality of degree on offer at the end to make third level education pay and take students into the sort of jobs that mean the degree cost genuinely qualifies as a graduate tax. If you are hammering students yet the quality of qualification is not greeted warmly by employers, then don’t be surprised if the students ask for their money back. If you create a market, and not look at elements beyond the market, isn’t that to be expected. 

The idea of learning for learning’s sake or of creating well rounded people who enjoy critical thinking and of making things better in the world is never really discussed when it comes to these debates. 

Desiring a world-class, third-level education system is a very good thing. Simply raising the bill every year for those coming through in order to keep paddling in ever-decreasing circles is not the answer. 

We need to think again about the benefits to society as a whole and why that is something in which we all should encourage investment. 

Paul McNamee is editor of the Big Issue. Read more of his columns here. Follow him on Twitter.

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